This year, the rate of canceling contracts to purchase apartments in Seoul reached the highest level since the survey began in 2020.
Frequent policy changes and regulatory measures appear to have increased market volatility, leading to more cases of transactions being reversed.
An analysis of apartment sale transactions in Seoul reported to the Ministry of Land, Infrastructure and Transport's actual transaction price system on the 30th found that among 75,339 transactions (excluding purchases by public institutions) from January to November this year, a total of 5,598 have been reported as canceled so far, accounting for 7.4% of all contracts.
This is the highest proportion since 2020, when the disclosure of whether a contract was canceled began in the actual transaction data.
The total transaction amount of canceled contracts reported so far is 7.6602 trillion won, with an average of 1.36838 billion won per contract. Even assuming a simple 10% penalty for canceling a contract, the total comes to 766.02 billion won, or an average of 136.83 million won lost.
Seoul's apartment contract cancellation rate rose from an average of 3.8% in 2020 to 5.9% in 2022, when the benchmark interest rate jumped and the transaction cliff deepened. It fell to 4.3% in 2023 and 4.4% in 2024.
However, while Seoul apartment transactions increased this year, a series of real estate measures were announced, including the lifting and expansion reassignment of land transaction permit zones early in the year, the June 27 loan regulation and the Sept. 7 supply measures after the new government took office in June, and the Oct. 15 expansion of regulated areas. As market volatility grew, it is analyzed that parties to transactions increasingly reversed their contracts.
By month, the cancellation rate, which was 6.8% and 6.6% in January and February, respectively, rose to 8.3% in March when the Seoul city government expanded and reassigned land transaction permit zones to the three Gangnam districts and Yongsan District, then showed an upward trend to 9.3% in April and 9.9% in May.
In June, when loan regulations were tightened under the June 27 measures, the cancellation rate hit a yearly high of 10.6%. In July, it also topped 10% at 10.1%.
The cancellation rates for October and November are still at 2.5% and 1.0%, respectively. However, cancellations are expected to increase over time.
By autonomous district in Seoul, Seongdong District, which ranked first in apartment price growth this year, had the highest cancellation rate (January–November) at 10.2%. Yongsan District followed at 10.1%, then Jung District (9.8%), Jungnang District (9.3%), Seodaemun District (9.0%), Gangdong District (8.7%), and Gangnam District (8.6%).
Songpa District had the lowest contract cancellation rate at 5.1% among Seoul's 25 districts. Next were Gwanak District and Gangseo District at 5.6% each, followed by Guro District (6.1%), Eunpyeong District (6.2%), and Dobong District (6.3%).